I’m sorry to do this to you, but I don’t really have Deirdre McCloskey reviewing David Graeber’s “Debt: The First 5,000 Years”. But did you feel how bad you wanted to read that when you saw that headline? Surely, one of our readers has the power to make this review happen.

In the meantime, here is McCloskey on Karl Polanyi, who instead of arguing that the economist’s view of pre-money barter is false, argued that the economist’s view of markets as existing throughout history is false:

…the mistake Polanyi and his school then make is to suppose without evidence that any regulation whatever obviates a market, quantitatively. An epsilon degree of social intrusion, they say, makes for No Market. The standard is again that of Arrow-Debreu -flawless markets or nothing. The presence of regulation -informal or legal- does change relative prices across markets. But it does not by itself eliminate market forces. In China at the height of the Cultural Revolution the women of the village secretly purchased produce from farmers and fishers before the watchmen started their day. Supply and demand popped up. How much? That remains for the economic scientist to determine.

Of course this is the mistake that all schools of economics make, believing they can prove the economy like proving a theorem in geometry. Proof in Math Department’s spirit -the existence of epsilon, no matter what its measure- is of no use for science, as may be seen in physics and chemistry. For the work of science one must measure (as Polanyi implies in appealing to a quantitative rhetoric). Polanyi is trying to prove capitalism false. But in such a matter not “proof”, only magnitude matters: how close to a perfect market economy does an actual economy have to be before the long-run considerations are to this or that degree admissible? How much of a self-regulating market needs to exist before we can assume approximately the functioning of market laws? It is not a metter of on/off, exist/not.

For those with more interest, here is a longer McCloskey article on Polanyi with Santhi Hejeebu. For what it’s worth, I think McCloskey is too dismissive of what economic proofs tell us. What good does it do, for example, to show how close an economy is to a perfect market economy if we cannot establish why and in what ways a perfect market economy is desirable? I agree with McCloskey that the work of science is to measure, but we must first know against what standard we are measuring.

In any case, I hope someone out there is spurred by this to hire McCloskey to write a review of Graeber.